ICAC report shot down Berejiklian’s defences then landed a hammer blow

It’s hard to recall a moment in recent NSW political history that looked as awkward as the exchange which took place in the Speaker’s dining room of the parliament on Thursday morning.

On one side of the table sat two officers of the Independent Commission Against Corruption, posing stiffly before the cameras as they hovered over the two hefty volumes which were about to irretrievably alter the fates of the disgraced ex-Liberal MP Daryl Maguire and his one-time love interest, former premier Gladys Berejikilian.

Awkward moment as the president of the Legislative Council Ben Franklin and the Speaker of the Legislative Assembly Greg Piper receive the ICAC’s report.Credit: James Brickwood

Looking almost as uncomfortable on the other side of the table were the state’s two most senior parliamentary officers – house speaker Greg Piper and upper house president Ben Franklin – into whose hands the ICAC’s report was about to be delivered.

There was a silent scraping of pens, a hurried declaration of the findings, a brief round of thank yous and perfunctory shaking of hands. The handover was done. Then came the aftershock.

It had been broadly expected that the once-revered Berejiklian would most likely fall afoul of the ICAC by failing to reveal to cabinet colleagues a long-standing secret relationship with Maguire, in contravention of her own government’s code of conduct, which seeks to flush out ministers’ potential conflicts of interest.

Many were unprepared, however, for the full weight of the ICAC’s hammer blow. This was the finding that her “concealment of the relationship from her parliamentary colleagues over an extended period of time” amounted to behaviour that could be “fairly and appropriately labelled as serious corrupt conduct”.

Gladys Berejiklian arrives at the ICAC on October 29, 2021.Credit: Renee Nowytarger

Similarly, ICAC refused to accept, on the evidence of numerous tapped conversations between the pair, that she’d been ignorant of Maguire’s extensive and questionable wheelings and dealings. Her failure to report suspicions about his conduct, despite his frequent mentions to her of the various property commissions he was expecting, amounted to “wilful blindness” and also constituted “serious corrupt conduct” the commission declared.

Berejiklian had hardly helped herself with her self-justifying behaviour in the witness box, which the commission judged to have been “highly unsatisfactory”. “She would not engage with the questions, was argumentative, and frequently asked rhetorical questions with the intention of deflecting the questioner,” the report scolded.

Nevertheless, there was shock at the findings, encased in a near 700-page report, which went off like a proverbial bomb in newsrooms. It had been nearly two years since the once-sainted Berejiklian had made her last appearance on the witness stand. In that time, there had been a state election, a change of government, and a move by Berejiklian into the corporate world as an executive for Optus.

Calls for the ICAC to explain why its report on her was taking so long to deliver were becoming more strident. Berejiklian’s supporters, in particular, were complaining about the “sword of Damocles” left hanging over her head.

This feverish anticipation was the backdrop to a decision by the parliamentary speaker’s office to give in to a torrent of media requests and let a pool camera in on Thursday morning to film the report’s delivery.

It cut no ice with Berejiklin’s staunchest supporters. Her chief spear-carrier, former treasurer and energy minister Matt Kean, declared the spectacle “unbecoming” of the ICAC and detrimental to public confidence in it.

Privately, responses to the report among Berejiklian’s former ministers were mixed, but there was head-scratching over why her conduct had been labelled not just corrupt, but “seriously corrupt”. If that was the case, some asked, why was the ICAC not proposing to refer her to the director of public prosecutions for possible charging, as had occurred with Maguire? (There’s limited awareness that an amendment to the ICAC act now requires it to make a finding of corruption only if the conduct is “serious”.)

Kean tweeted “so it has taken ICAC two years to tell us that Gladys Berejiklian has not broken the law”. He followed up with an opinion piece in this masthead questioning whether the watchdog was entitled to make “serious findings based on its interpretations of the evolution of someone’s love life”.

Another former minister told the Herald that the “serious” part of the corruption finding against her “did not pass the pub test”.

Yet anyone thinking this way must be “drinking in [a pub called] the Liberal Party Arms” quips barrister Geoffrey Watson SC, a veteran of the ICAC who famously served as counsel assisting the commission when it was investigating the murky dealings of Eddie Obeid.

“It’s an incredibly common practice of the ICAC to make findings of corrupt conduct and not make a recommendation of prosecution,” Watson told the Herald.

“The statutory definition of corrupt conduct can apply to a lot of conduct which itself does not constitute a crime.” One example he cites is pork barrelling (the lavishing of grants on marginal seats) which can be “reprehensible and contrary to the public interest but still not a crime”.

The ICAC, in his experience, would “not exercise the power to declare somebody to have committed corrupt conduct unless it is serious. That’s been a kind of internal rule”.

Yet Watson, a self-avowed fierce advocate for the anti-corruption body, levels harsh criticism against this particular ICAC report on other grounds.

The first is the delay, which he says has been “cruel”. He is not alone on that score. The Minns government has now flagged that it will force the commission to give itself deadlines for publishing reports on future investigations.

Watson says he’s also aghast at the “absurd” length, complexity, and sheer density of the report on the Berejiklian/Maguire matter, which the ICAC has dubbed Operation Keppel.

Former ICAC counsel assisting, Geoffrey Watson SC.Credit: Rob Homer

He recalled that the Obeid inquiry report was markedly shorter (perhaps 120 pages), “and that was a far more complicated inquiry than this one was,” Watson says.

The report on Berejiklian and Maguire “didn’t need to be that long – it’s just stupid, and it’s excessive, and it’s not what administrative bodies are supposed to do when making decisions which are properly presented to the public”, Watson adds.

“The ICAC has let itself down … Nobody [apart from lawyers, judges and the media] is going to sit down and read through this thing... But ICAC itself should be saying that we set a standard whereby we want to produce a report that is readable and digestible by the public.”

In its defence, the commission appears to sheet some of the blame for the report’s sheer length and complexity back to Berejiklian herself.

In a statement on Thursday, the commission said that a failure to “promptly report suspected corrupt conduct” meant it had to deploy “all of its coercive powers as the different layers of the investigation were discovered”. Earlier reporting of suspected corruption “could have prevented aspects of the conduct and shortened what became a complex, multi-stage investigation”.

It was also at pains to point out that the investigation had had to process “more than 8,630 pages of transcripts, 708 exhibits and 957 pages of submissions”.

Also overlooked in much of the commentary is that the ICAC has made sweeping recommendations to reform the codes of conduct applying to MPs, including advice on how to improve their training, that of their staff, and the administration of grant schemes. The aim, the Commission says, is to “address systemic weaknesses … and reinforce NSW Parliament’s ethical culture”.

Berejiklian’s lawyers are now reportedly looking at what the options for an appeal might be. Much of the wall of legal analysis in the report looks like a pre-emptive shoring up of the commission’s defences should an appeal proceed.

Her supporters are keen to point out that buried in the ICAC report is its final assessment that the premier’s conduct “does not reach the very high bar required to make out the offence of misconduct in public office”.

Gladys Berejiklian was on our television screens every day during the pandemic.Credit: James Brickwood

Publicly the woman who was once a daily fixture on the state’s TV screens has said little in response to the watchdog’s report apart from issuing a defiant statement on Thursday afternoon which contained no hint of regret or contrition. “Serving the people of NSW was an honour and a privilege. At all times I have worked my hardest in the public interest. Nothing in this report suggests otherwise,” Berejiklian said.

The origins of the Maguire and Berejiklian ICAC saga go back seven years, to May 2016, when Maguire first came to the ICAC’s attention as a subsidiary player in what was then dubbed Operation Dasha, a corruption probe into key figures associated with Canterbury City Council.

It became clear from phone taps that Maguire was enmeshed in a secret scheme to seek commissions from property developers, notably Country Garden Australia, owned by a Chinese company. ICAC then opened a separate investigation into Maguire, dubbed Operation Keppel, which in turn ensnared Berejiklian as he regaled her with details of his various schemes, constantly whinged about his finances, and badgered her from time to time about pet projects that he wanted the government to fund in his electorate of Wagga Wagga.

Two of those projects, in particular, caught the attention of the commission: multimillion dollar government grants to the Australian Clay Target Association, a gun club, and the Riverina Conservatorium of Music, both in his electorate.

It was plain from evidence given by senior public servants that these projects were, at best, of highly limited merit and there was puzzlement as to why they were getting a political push from the top.

Even some government staffers were baffled. Nigel Blunden, serving in 2016 as then premier Mike Baird’s director of strategy, was stumped as to why the funding of the gun club had been put on the agenda of the powerful Expenditure Review Committee (which Berejiklian as treasurer was then chairing) when he was doing his best to head it off.

“Gladys and [minister Stuart] Ayres want it” he wrote to Baird. “No doubt they’ve done a sweetheart deal with Daryl but this goes against all of the principles of sound economic management.”

Clay-target association president Robert Nugent, Sports Minister Stuart Ayres, centre, and Wagga MP Daryl Maguire. Credit: ACTA Annual Report

The ICAC found that that several of Berejiklian’s actions had served to facilitate the ACTA proposal “in circumstances where she knew that Maguire was its principal proponent” and that she’d also “exercised her official functions” in connection with the conservatorium funding.

Maguire, meanwhile, was branching out into a variety of schemes to line his own pockets, including trying to broker a commission on land dealings around the proposed Badgerys Creek airport.

Berejiklian was unbending and defiant when the commission hauled her in to grill her about her knowledge of this and others of Maguire’s schemes in October 2021.

Some of the phone intercepts appeared damning on this score, including one where she told him, “I don’t need to know about that bit”. But she denied that this and a handful of similar statements were signs that she was actively turning a blind eye to his activities.

She was just bored, she said. He was a big talker with pie in the sky ideas that she didn’t take seriously. She repeatedly insisted she had done nothing wrong. She had never suspected Maguire of misdeeds and would have reported him if she had known otherwise.

As for their relationship, which the ICAC dated from early-2014, it was never of sufficient status for her to have needed to declare it, she insisted.

Yet that insistence was undercut at every turn in the secretly recorded conversations between them. There were hundreds of messages, every day, or couple of days, and “often multiple times in a day” the ICAC said.

Topics included “plans for meals and drinks together after work, plans for holidays and attending social events together”, references to Berejiklian’s Sydney residence as “home” and “mundane domestic arrangements such as requests to pick up bread and things to eat on the way ‘home’.”

Gladys Berejiklian, the then-NSW minister for transport, with then-Wagga Wagga MP Daryl Maguire in his electorate in 2015.Credit: Les Smith/The Daily Advertiser/ACM

The exchanges were “replete with terms of endearment, the use of pet names and other indications of mutual affection and love. They include discussions about marriage and the possibility of having a child together … From at least the early part of 2014 onwards, the messages are consistent with physical and emotional intimacy”.

The final report included a previously unpublished exchange between the pair which, according to the commission, further illustrated how far Berejiklian had fallen under Maguire’s spell.

In the phone call, made on Valentine’s Day 2018, Berejiklian is seemingly trying to placate Maguire who is upset about his standing in the relationship.

GB: Because you know what I tell you why, because normally you’re the boss and it’s hard when we have to switch it around that’s the truth.

DM :Yeh but I am the boss, even when you’re the Premier … Glad, even when you are the Premier, I am the boss alright.

GB :Yes I know.

Berejiklian dismissed this exchange as “banal reassurances”.

But the ICAC said it showed her “preparedness to seek to placate him in order to preserve their private relationship”.

Berejiklian had described Maguire as “family” to her in private conversations. But she walked away from this in evidence, saying their entanglement bore none of the hallmarks of a “normal” relationship. “We weren’t public … I didn’t see him very often, I was very busy. I did speak to him frequently, but we didn’t see each other very often.”

Years of intercepted phone calls and text messages underscored what the ICAC said was an ongoing, intimate and profound relationship between Gladys Berejiklian and Daryl Maguire.Credit: Marija Ercegovac

But the ICAC said: “The fact that a relationship does not conform to a social template, or legal definition, does not detract from it quality and strength.” Berejiklian dismissed the ICAC’s analysis on this point – that it was “human” to please someone you love – as “puerile”. In turn, the commission labelled her response “supercilious and unworldly”.

It said she had a tendency to “view the witness box as more like a husting than a place from which to respond directly” to questions, and that she was an “unsatisfactory witness in many respects”.

The report provides a window into the arsenal of legal arguments her team amassed in their efforts to deflect the commission from a corruption finding.

One prime example concerns the scope of the NSW ministerial code of conduct, the enforcement of which comes within the purview of the commission.

The former premier treated the witness box like a bully pulpit, the ICAC says.Credit: ICAC

The code demands that ministers declare potential conflicts of interest to the premier and spells out that a range of different relationships (including those where the minister is in an “intimate personal relationship”) should fall within the definition of “family”.

The code’s whole raison d’etre is to ensure ministers don’t mix up their public duty and their “private interest” by giving favourable treatment to those in their inner circle.

Yet Berejikilian’s lawyers sought to argue the code did not apply to the premier because its language is couched in terms of the obligations of “ministers”.

ICAC dismissed this as an “illusory” distinction, saying it was plain the premier must also be covered by the provision. It would be “a remarkable conclusion that delegated legislation expressed to apply to all ‘Ministers’ … would not apply to the most senior public official in the state”, the commission observed tartly.

Berejiklian and her team also sought to dispute that her relationship with Maguire could be characterised as a “private interest” for the purposes of the code.

The ICAC shot this down too, ruling that a “private interest” did not have to be pecuniary in nature, and that in Berejiklian’s case, the interest took the shape of a desire to maintain and advance her relationship with Maguire.

A further argument was mounted about whether she had a “duty to declare” the interest to her cabinet colleagues.

It was put to the ICAC by Berejiklian that “a treasurer or a premier does not have the same obligations of impartiality when making decisions as a solicitor or a financial adviser when advising their client, or a judge when deciding a case, and that political considerations legitimately intrude”.

There was nothing illegitimate, she and her lawyers argued, “in a treasurer or a premier making decisions that may further the electoral prospects of a local member”.

ICAC rejected this argument too, going so far as to say that in its view, she could not make ”a decision for the unacceptable reason of electoral advantage for anyone [emphasis added], whether or not Mr Maguire”.

Yes, the ICAC added, it was permissible to give electoral considerations “some weight” but it would be a breach of an “official function” if a decision was informed “only” by a desire to enhance popular standing. This potentially throws open the whole practice of government pork-barelling to wider inquiry.

Berejiklian also tried to argue that there was a “dearth of evidence” showing that she had treated Maguire any differently to other MPs.

Indeed, she argued, the very fact that the revelation of their secret relationship was such a shock to everyone was proof, in itself, that noone who had dealt with her had detected “any partiality whatsoever”.

The ICAC retorted that there could be no “true” comparisons” because it could be “tolerably assumed they [other MPs] were not in a close personal relationship with her”. It was an argument lacking realism, or credibility, the commission said.

It also pointed out that Berejiklian had been at pains to declare a conflict of interest involving two of her cousins who had gained employment with the NSW public service. “It is apparent from this [and other examples] that Ms Berejiklian understood conflicts of interest in a broader sense” the commission said.

Her predecessor Mike Baird, once a mentor and friend, testified that it had been standing practice at each meeting of the powerful expenditure review committee to declare conflicts of interest, and he had no doubt that she should have made such a declaration.

Magurie already faces one charge arising from a previous ICAC inquiry involving an inner west Liberal councillor and has been slapped with federal charges arising from a cash for visas scheme. The ICAC has referred the matters arising from Operation Keppel to the DPP for further consideration.

Should Berejiklian choose to appeal the findings against her, many legal observers do not give her a high chance of success. Nick Greiner, another Liberal premier undone by the ICAC, succeeded in having findings against him overturned – but the legislation has been tightened since then.

In October 2021, just after the watchdog announced that Berejikian, the “people’s premier”, was now under suspicion herself, her former deputy John Barilaro famously declared that “ICAC never asks a question that they don’t already have the answer for” . Thursday’s report would seem the proof of that.

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